Assistance Given to Litigants in Person: Can A Judge Go Too Far in Trying to Strike a Balance?

The presence of Litigants in Person (LiP) in court proceedings is now commonplace. The proportion of cases that involve a LiP on both sides of a dispute continues to rise as do those cases where at least one party is a LiP. In the former, whilst of course not ideal as the assistance of a legal representative is often crucial, at least a level playing field is more likely to be maintained. However in the latter, a LiP can, understandably, feel considerably disadvantaged, particularly when their lack of representation is due to a lack of funds rather than a conscious choice. As such a Judge may feel morally obligated to offer some form assistance to the LiP, however the Court of Appeal recently took issue with the level of intervention provided by a trial Judge.

Case Law

In Global Corporate Ltd v Hale [2018] EWCA Civ 2618 the Respondent, Mr Hale, was a director and shareholder of Powerstation UK Ltd (“the Company”) and between 24th June 2014 and 26th October 2015 he received various payments from the Company totalling £23,511. The Company was placed into creditors’ voluntary liquidation on the 25th November 2015 with a deficiency of around £173,594.99. The Company documentation suggested the payments to Mr Hale were made by way of dividends, and the liquidators took the view that such dividends had been paid unlawfully as the Company had insufficient distributable reserves of profits from which to pay them. The liquidators assigned their rights to Global Corporate Ltd who pursued Mr Hale for the sum in question.

Mr Hale accepted that the Company was balance sheet insolvent but denied that it had traded insolvently. In respect of the payments that he had received he argued that pursuant to advice of the Company’s accountant he was paid by way of a monthly payment via PAYE and also a monthly dividend, it being, he claimed, a more tax efficient way of dealing with remuneration. A record of the payments were kept in the Company accounts and at the at the end of the financial year the accountant would consider the books and if there were insufficient distributable reserves to justify the dividends, they would be reversed and the Company would pay the necessary tax, a practice the Company had adopted in the two previous tax years.

Mr Hale represented himself at trial, and although the Judge accepted that, as the Company had no profits available for distribution, payment of the £23,511 to Mr Hale would be unlawful and thus the money was repayable, he rejected the claim on two alternative grounds. The first being that the decision to make the disputed payments as dividends was no more than a decision in principle and was subject to the Company’s accountant at the end of the financial year; and secondly, that there had been no valid decision at all to pay the monies as dividends at the time when the monies were paid so the relevant sections of the Companies Act 2006 had no application to the £23,511.

On appeal, Lord Justice Patten found this curious, as of course, that had not been Mr Hale’s case, indeed he had accepted in his witness statement, and on a number of occasions under cross-examination by those representing the Applicant that he received the monthly payments ‘as a dividend.’

However on completion of cross-examination “the judge proceeded to ask Mr Hale a series of questions designed to examine the basis on which the dividends had been declared having regard to the possibility that after the year end the accountants might take steps to ‘reverse’ that process. Most of the questions are highly leading and even when Mr Hale responded negatively to the questions the judge persisted.”

Lord Justice Patten stated that “it goes without saying that a trial judge is perfectly entitled to ask a party or other witness to clarify answers which he had given during his evidence.” However Lord Justice Patten went on to say “The judge’s ultimate finding was based upon a new line of cross-examination introduced by the judge himself for which there was no existing evidential basis. None of this, in my view, is at all satisfactory…”

Lord Justice Coulson concurred with the views of Lord Justice Patten, stating:

…in my view, the nature and extent of the judge’s questions of Mr Hale at the end of his cross-examination was inappropriate. It is always difficult when one party is represented and the other is not, and the judge was required to maintain a fair balance so as to ensure a proper hearing of Mr Hale’s case. But the judge’s use of long leading questions, in which the answer he considered to be correct was made all too obvious to Mr Hale, on an issue which had never before even been raised, went much too far in attempting to counter any perceived imbalance or inequality of arms.”

Guidance

Lady Justice Asplin went on to provide some helpful guidance which practitioners may find offers assistance as to the role they should expect the Judge to play in a case

in which their opponent is a LiP, stating as follows:

“A trial judge is perfectly entitled to ask a party or other witness to clarify the answers he or she has given in evidence and it is often important to do so. Where a party is unrepresented, as a matter of fairness both to the unrepresented party and the other party or parties to the litigation, it may also be both appropriate and necessary to ask questions in order fully to understand the unrepresented party’s case as pleaded, their submissions and their evidence. In doing so, the judge should take care not to ask leading questions of the unrepresented party in his capacity as a witness. It may even be necessary to ask questions of other witnesses about matters central to the issues in the case which have not been posed by the unrepresented party in cross-examination. Such questioning should be approached with caution and limited to essential matters…It is very important that whilst seeking to clarify the issues and the evidence and to be fair to all parties the trial judge does not stray from the case as pleaded and the evidence before the court.”